I just stumbled upon this Reddit post and I don’t have time to look into it before I go to sleep: https://www.reddit.com/r/SPACs/comments/r6jsfd/updated_dd_on_essc_341131_share_free_float_with/
Apparently ESSC has a 341,131 share free float and it has an options chain. Based on call volume today I think the OI is about to build extraordinarily quick.
Closed 12.28 today
Thank you! Got in at open!
looks like they are merging with JHD holdings which is a chinese company
I can confirm after reading through the SEC filings that the float of this does appear to be 340,000 shares. Current ITM OI is 226% of float.
Only concern is that the volume on the ITM 12.5 is less than the OI and the volume on the OTM 15 is higher than the OI, which may indicate that a high percentage of the ITM OI rolled and may be killing the momentum they were building.
damn that shit the bed
In short, we don’t. We’re not here to pump things, we’re here to play things that are moving. People should buy what is right for them, we don’t need to make our fortunes on the backs of others.
With that said, it looks as though my concerns were justified on this play:
The stock is now below $12.50 putting all the substantial OI OTM and killing the momentum of the gamma squeeze. What very likely happened is, as I said, retail rolled up to the $15 strikes once the $12.50 options became ITM, which removed the MM’s need to hedge and allowed them to unwind, which is probably the cause of the recent selloff.
The good news is that if you’re looking to play this, the entry is now cheaper and with such a small float, it doesn’t take much to build more of a ramp.
I took a small gamble position here.
What expirations is everyone playing?
I’m just doing 12/17’s, but I’m trying to go for $10C’s.
what strike/exp did you take?
10’s, 12.5’s & 20’s, all soonest expiring.
This is still pre-merger so the floor should be around $10 right? Obviously it can dip into the 9s but there isn’t really a huge risk of a complete tank here correct?
Part of the reason for the small float is the large number of redemptions. So the redemption to get $10 per share back has already happened, and the $10 floor is now removed, is my understanding.
There was also a $10.26 (or 10.41?) “floor” (see the Reddit DD about the NAV), I think, because of the delay in securing the merger.
Another thought - since the options aren’t expiring this week, if a gamma squeeze does happen, would we expect it for the week of the 12/17 expiry, if the OI is sufficient?
Ah ok that makes sense, thanks for the clarification!
This is correct.
Per our understanding, options expirations actually have a lot less to do with squeezes than you’d assume. There’s really no evidence supporting that a certain timeframe from OpEx is a catalyst.
Clarifying this because I see some questions about it still in Discord:
There is NO FLOOR, the vote has happened and shares that could be redeemed are redeemed.
Commenting on the “floor” thesis as well, it literally only applies to shares. If you own a share, you can redeem that share for $10.00 before the vote. So while SPACs that are pre-merger do enjoy a certain safety, that safety is removed in this scenario.
